The WACC of Century Casinos Inc (CNTY) is 12.0%.
| Range | Selected | |
| Cost of equity | 13.40% - 22.30% | 17.85% |
| Tax rate | 22.60% - 25.50% | 24.05% |
| Cost of debt | 10.40% - 20.90% | 15.65% |
| WACC | 8.3% - 15.8% | 12.0% |
| Category | Low | High |
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 2.08 | 3.11 |
| Additional risk adjustments | 0.0% | 0.5% |
| Cost of equity | 13.40% | 22.30% |
| Tax rate | 22.60% | 25.50% |
| Debt/Equity ratio | 24.68 | 24.68 |
| Cost of debt | 10.40% | 20.90% |
| After-tax WACC | 8.3% | 15.8% |
| Selected WACC | 12.0% | |
The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.
This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.
Here’s how we figure out the cost of equity for CNTY:
cost_of_equity (17.85%) = risk_free_rate (4.15%) + equity_risk_premium (5.10%) * adjusted_beta (2.08) + risk_adjustments (0.25%)
We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.